Macy's had to discount spring goods to entice cautious consumers and sees more warning signs ahead

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Macy’s heavily discounted spring goods to make room for fall and holiday merchandise in the face of customers’ cautious spending in a challenging economy

NEW YORK — Macy’s heavily discounted its spring goods to make room for fall and holiday merchandise in the face of customers' cautious spending, but the retailer's adjusted second-quarter profits and sales still topped Wall Street expectations.

Macy's, which also operates upscale Bloomingdale's as well as Bluemercury beauty stores, on Tuesday reaffirmed its annual sales and profits forecasts, while still noting uncertainty about the economy in the second half of its fiscal year. The company cited a faster-than-anticipated rise in credit card delinquencies, signaling more financial pressure for shoppers in the back half of the year.

Macy's also joined many other retailers in flagging uncertainty over the end of the student loan moratorium, which had provided one-time college students a little more financial breathing room.

Shares in Macy's Inc. were down more than 14% in afternoon trading on Tuesday.

“As we plan the remainder of the year and we think about 2024, we remain cautious on the pressures impacting our customer, especially at Macy’s, where roughly 50% of the identified customers have an average household income of $75,000 or under,” CEO Jeff Gennette told analysts during the company's earnings call Tuesday.

Gennette noted that over the past several quarters, he has seen Macy's customers more aggressively pull back on discretionary items and become more intentional in their purchases.

Macy’s is one of the last remaining retailers to report second-quarter results in an earnings season that has shown how still-high inflation, despite some easing, and higher